Maria Contreras-Sweet
of Promerica Bank
says Folk. “I took
in clients who had
hundreds of thousands of dollars and
couldn’t get a check
cleared for $10,000. That check
was put on hold for two weeks
with [a national bank].”
Folk works with many
entrepreneurs and sees how
they are struggling to continue
to create jobs during the current
economic crisis.
Among the costs that eat up
an entrepreneur’s revenue are
salaries, healthcare for employees
and supplies to create their
products and services.
Entrepreneurs often build their
business by leveraging the equity
in their home or another asset.
But the current economy has
devalued home prices. And when
a neighbor forecloses or sells a
home for less than the amount at
which it appraised, the value of
the entrepreneur’s home decreases more, making it tougher to use
the house as collateral for a loan.
“We’re hearing across the
country that when the media
talks about big banks going under,
there’s an assumption that com-
munity banks don’t have money to
lend,” says Adalberto Quijada, district director for the Small Business
Administration (SBA) in Santa Ana,
Calif. “That’s not the case. They are
in a good position to lend.”
“We’ve been getting
more calls because larger
institutions are so tight,” says
Maria Contreras-Sweet, founder
and chairwoman of
Promerica Bank. “We
have not gotten into
the types of loans
that have been the
subject of so much
controversy … so we
remain capitalized
[and] solid.”
Even so,
Promerica, a Latino-
owned financial institution in
downtown Los Angeles, has also
tightened its lending standards.
“We’re being much more
thorough in verifying assets,” says
Contreras-Sweet. “You have to do
that in this environment, make
sure assets are what they are. And
Adalberto Quijada, district
director for the Santa Ana
District Office of the Small
Business Administration
we’re working closer with credit
monitoring. If someone takes out
a loan to build a second franchise,
we check on them to make sure
they’re on time.”
Contreras-Sweet, who was
California’s first Latina Cabinet
secretary, says a community bank
knows its customers, their culture
and their business practices. So
even though the bank has
tightened its lending practices, it
will still work with customers to
try and achieve their business and
personal goals.
“It’s one thing to say we have
some [marketing] items that are
translated. It’s another to say our
management team is made up of
people from El Salvador, Mexico,
Guatemala, and Mexican Americans who were born here,” says
Contreras-Sweet.
Promerica provides a bank that
is respectful of Latinos and intimately concerned with the community’s success. It features sit-down
teller lines, client-relationship
managers who get to know a
prospective client personally, and
classes on SBA-backed loans.
Promerica has a “preferred lender
status” with the SBA. That speeds up
the process of getting a loan.
“I find that because people of
color and women don’t have the
history of using capital for generations, they like coming in to learn,”
says Contreras-Sweet.
Folk is among those business
owners who are attracted to the
personal service they receive
from the Hudsons and Contreras-Sweets of the community-banking
industry.
“Most banks don’t know that
minorities exist,” says Folk. “I’d
much rather go to a community
bank that puts its money back in
the community. If I put money in
Broadway Federal, I know it will
invest that money among people
who look like us.”
